Plaintiff: Company A (subcontractor)
Defendant: Company B (General Contractor)
Defendant: Company C (contractor)
Company C as the contractor and Company B as the general contractor signed the "EPC Total Price Contract" on August 11, 2013. Company B's contract with Company C included the civil engineering, mechanical and electrical installation and other engineering contents. Company B signed a "Construction Contract for Construction Projects in Guangdong Province" with Company A on June 16, 2014 in order to perform the work content stipulated in the "EPC General Contract Price Contract", and agreed that Company C will contract the electromechanical equipment within the scope of its general contract The air-conditioning installation works of the ninth and tenth bidding sections of the installation project were subcontracted to Company A for construction. The final project payment was RMB719,0490.00. Company B paid a total of 5713548.83 yuan to Company A, and the remaining 1476941.17 yuan has not been paid so far. Now company A appeals to request company B to pay RMB 1476941.17 including project arrears and interest on overdue payment (temporarily calculated as RMB 50934.23), and at the same time requires company C to assume joint liability for the aforesaid debt.
Referee result
After the trial, the people's court made the first instance judgment:
1. Defendant B paid the project 1461941.17 yuan and overdue interest to Plaintiff A within seven days from the date of the legal effect of this judgment;
2. Defendant C is jointly and severally liable for the above-mentioned debts within the scope of arrears of Defendant B’s engineering payments.
Case analysis
The concept and system of the actual builder was the first in the "Interpretation". It has indeed played a certain positive role in protecting the rights of migrant workers in a certain historical period. However, due to the lack of a unified understanding standard, courts in various places have repeatedly appeared "different judgments in the same case". In circumstances, there is credibility of justice. In the above case, the court of first instance considered that the contract between Company A and Company B was legal and valid, and when it was ascertained that Company B and Company C had entered the lawsuit due to settlement issues, only Company C was the contractor. The unpaid project payment is directly determined to be jointly and severally liable for the project payment and interest owed by Company B to Company A. The author holds different opinions on this. To this end, the following explorations have been made on the application of Article 26, paragraph 2 of the Interpretation.
1. Definition of the actual builder
(1) Concept of actual construction person
On August 24, 2016, the Supreme People’s Court responded to the recommendation No. 9594 of the Fourth Session of the Twelfth National People’s Congress on the “Response of the Supreme People’s Court on the Recommendations for Unifying the Judicial Confirmation Conditions of “Constructors” in Construction Contract Disputes”: "Actual construction person" refers to the main body that actually completed the project construction in the construction contract that was determined to be invalid according to the law, including construction companies, construction company branches, foreman and other legal persons, unincorporated groups, individual citizens, etc. The concept defined in the Court's Interpretation of Applicable Legal Issues in the Trial of Construction Contract Dispute Cases (hereinafter referred to as "Interpretation") is designed to distinguish between legal concepts such as contractors, builders, and construction enterprises of valid construction contracts. In order to protect the legitimate rights and interests of migrant workers and maintain the overall social stability, the judicial interpretation of Article 26, paragraph 2, stipulates that in the case of arrears of payment for subcontracted labor services and further payment of wages to migrant workers, the actual builder can break the contract. The contractor and the general contractor who have no contractual relationship with the sexuality filed a lawsuit for the repayment of the arrears of the labor subcontracting project; the first paragraph of this article also stipulates that the principle cannot break through the relativity of the contract and should claim rights in accordance with the contract.
(2) The manifestation of the actual constructor
1. Borrow qualifications or attach
2. Illegal subcontracting
3. Illegal subcontracting
Second, the basis of the right of the actual construction person to claim
Regarding the rights basis of the actual builder’s right to stipulate in Article 26 of the Interpretation, there are mainly four viewpoints: the theory of factual contractual relations, the theory of subrogation, the theory of improper gains, and the theory of breakthrough contract relativity:
(1) The factual contractual relationship. Zhu Shuying's "Questions and Answers on Engineering Contract Affairs" holds that there is a de facto labor contract relationship between the actual builder and the contractor. According to Article 36 of the Contract Law, "Migrant workers complete their construction obligations by providing labor services, and the contractor accepts this process, which is equivalent to accepting the payment of migrant workers by deeds. According to the above provisions of the Contract Law, it should be It is considered that the contract has been established, which constitutes a de facto contractual relationship." This view is similar to the determination of the factual marriage relationship and the factual labor relationship, but the author believes that the contractor in most cases does not know the existence of the actual builder, let alone the two parties. There is agreeable meaning. Actual construction workers (contractors) and migrant workers are two different concepts. Individual migrant workers are not in the category of actual construction workers. Assuming the establishment of a de facto contractual relationship, the actual construction workers directly choose to sue the first-hand contractor or contractor. There is no need to create an actual builder system through the "Interpretation." Therefore, the fact that the contractual relationship does not meet the laws of legislation.
(2) Improper gains. Improper profit refers to a situation where there is no legal basis to damage one party and profit the other. The profitable party shall be obligated to return. In view of the particularity of the construction project construction contract, it is impossible to use the method of return after the contract is invalid, and it can only be compensated at a discount. Therefore, if the developer fails to pay the full amount of the project in accordance with the contract, the part of the consideration that has not been paid for the project shall be a benefit obtained without legal basis and shall be returned at a discount. The author believes that there will be a problem with this view that any migrant workers or actual construction workers will be the damaged party, which is contrary to the purpose of the "Interpretation". In addition, the contract issuer is not purely profitable, but instead obtains the building according to an effective engineering contract and pays the corresponding consideration. Most of the unpaid or arrears of the construction payment are not paid because of disputes over the settlement price or the quality of the project.
(3) Relative theory of breaking the contract. Contract relativity is the basis and premise on which contract rules and systems are established. Article 26 of the Interpretation stipulates that the actual builder can claim rights from the contractor outside the contract, which is a breakthrough in the principle of contract relativity. The author believes that this statement does not justify the facts for its argument to demonstrate, lacking legal basis.
(4) The right of subrogation. There are many supporters of the theory of subrogation. This view undoubtedly recognizes that Article 26 of the Interpretation is a breakthrough in the relativity of the contract, but within the current legal framework, "it should be determined that its subrogation system is in the construction project. Specificity in the field of construction contracts". I prefer this statement. How to understand and apply the provisions of Article 26, paragraph 2 of the "Judicial Interpretation of Construction Projects" in Article 24 of the "Answers to the Difficult Questions of the Guangdong Provincial High People's Court on the Trial of Construction Project Contract Disputes" To make the following answer: "The contractor shall only be liable to the actual builder within the scope of the payment of the project payment" provided in the second paragraph of Article 26 of the "Judicial Interpretation of Construction Projects" shall be characterized as joint and several liability. If the contractor and the general contractor do not enter the arbitration and litigation procedures for the dispute over the construction cost, after the actual builder sue the counterparty of the contract separately, the contractor shall be sued in a separate case against the payment of the construction cost within the scope of the payment of the construction price. According to the second paragraph of Article 26 of the Judicial Interpretation of Construction Projects, the contract issuer shall provide proof of the amount of the project payment paid to the general contractor. If the contractor and the general contractor have settled the project payment, the project payment shall be deducted according to the project settlement fee to determine the amount of the contractor’s outstanding payment; the contractor and the general contractor have not settled the project payment and have not entered the arbitration 3. In litigation procedures, according to the actual completion of the project, the amount of the project payment owed by the contractor can be determined by deducting the project settlement payment agreed in the contract. After the actual settlement by the contractor and the general contractor, if the contractor still If the construction contractor is owed the actual contractor, the actual builder may sue separately for the difference; if the contractor and the general contractor enter into arbitration or litigation proceedings regarding the settlement of the construction contract, the actual contractor may apply to participate in the litigation of the case. In another case, if the contract issuer assumes responsibility for payment, it will not be accepted. It can be seen from this that the Guangdong High Court is also inclined to the theory of subrogation. The Supreme People's Court Zhengzhou Hand in Hand Group Co., Ltd., Henan Provincial Metallurgical Construction Co., Ltd. Construction Contract Disputes [(2018) Supreme Law No. 391] The main text of the second-instance civil judgment on pages 16 to 17 corresponds to whether the actual construction person supports Hand in Hand Company (Contractor) asserted that the rights have been determined. "This Court believes that even if Shen Guangfu is the actual builder attached, Article 26 of the Judicial Interpretation of the Construction Contract does not clearly provide that the actual builder attached has the right to claim rights from the contractor. In addition, in the case where the contractor has claimed rights from the contractor, his claim should not be supported." The Supreme Court "contractor has claimed rights from the contractor" as asituation that excludes the actual construction right of the contractor. There is also a tendency to subrogation.
3. Other requirements raised by the actual construction right
In addition to satisfying the main requirements of the actual builder, it also needs to reach a considerable degree of "it is difficult to guarantee the realization of rights without prosecution." As one of the drafters of the Interpretation, Judge Feng Xiaoguang pointed out: "Comprehensively and accurately understand the provisions of Article 26, paragraph 2 of the Interpretation, which should be interpreted in conjunction with the provisions of paragraph 1 of the article. In principle, the actual builder is not allowed to file The contractor is the defendant and the general contractor is the defendant; only when the actual contractor of the actual contractor's contract is bankrupt and the whereabouts are unknown, the actual contractor does not file a lawsuit against the contractor, such as the contractor or the general contractor, who has no contractual relationship. Only when it is difficult to guarantee the realization of rights, the actual builder is allowed to bring a lawsuit against the contractor, such as the contractor or the general contractor, as the defendant." The author believes that it is necessary to strictly limit the right of the actual builder to sue and not expand it arbitrarily. Otherwise, there will be too much unpredictability of the investment risk as a builder. For example, in addition to resolving the lawsuit with the general contractor, it may also be involved in the lawsuit of countless actual builders. Obviously unfair.
In the process of agency in this case, the author believes that Company A does not belong to the category of “actual builder”, and the court of first instance also found that the contract signed between Company A and Company B was legal and effective. The main requirements of Article 26.
Admittedly, if the court of first instance thinks that Company A has the corresponding construction qualifications, it should not be based on the business scope of the industrial and commercial registration, but should determine the effectiveness of the contract based on the specific construction qualifications. The author believes that there is still room for discussion. After all, the two belong to different concepts. However, even if the court determines that Company A is the actual builder, according to the above-mentioned answer of the Guangdong Provincial High Court, the dispute between B and C in the project settlement has entered the litigation process, and Company A can only request to participate in the case of the dispute over the construction contract. Among them, it is not possible to sue the company C to bear the payment responsibility.
Author: Gu Yingming | Editor: Yue Zhan Chuan
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